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Pension deal done, but some officials not happy

Published: Wednesday, Dec. 4, 2013 5:30 a.m. CDT • Updated: Wednesday, Dec. 4, 2013 7:30 a.m. CDT

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Illinois Gov. Pat Quinn on Tuesday touted the passage of a comprehensive pension reform that he said will erase the unfunded pension debt and provide 100 percent funding for the systems.

In a statement, Quinn said he inherited “the worst-funded pension crisis in the nation due to decades of mismanagement,” and made pension reform a top priority, broke ongoing legislative gridlock and worked with leaders and lawmakers to pass the bill.

“I’ve pushed relentlessly for a comprehensive pension reform solution that would erase a $100 billion liability and restore fiscal stability to Illinois,” Quinn said in a statement. “Today, we have won. The people of Illinois have won. This landmark legislation is a bipartisan solution that squarely addresses the most difficult fiscal issue Illinois has ever confronted.”

But others, including State Rep. Mike Fortner, R-West Chicago, voted against it.

“My feeling is that it was unconstitutional particularly as it affects retirees,” Fortner said. “The state constitution says retirees pensions’ ‘cannot be diminished or impaired.’ It’s crystal clear.”

Future legislatures would not be bound by the guarantee of funding because the language is no stronger than what already exists, he said.

“The pension system can sue if the state fails to make the payments required by law. Because all the past problems of pension holidays and all that other stuff, the Legislature never missed a payment required by law,” Fortner said. 

“We changed the law … so it would not be able to sue us. During budget process, if a future legislature wants more money for something, they go back to same old tricks,” Fortner said. “The so-called ‘guarantee’ is a wink and a nod and a hope that a future Legislature will do what supposed to. It hasn’t worked.”

The We Are One Illinois coalition of unions representing more than 1 million public employees and retirees said in a statement, “This is no victory for Illinois, but a dark day for its citizens and public servants.”

The Civic Committee of the Commercial Club, however, lauded the bill, as a “necessary and meaningful” compromise to improve state’s fiscal outlook.

“This bill isn’t perfect, and it wasn’t without compromise, but it was undoubtedly the right thing to do for the state and its citizens,” Civic Committee president Ty Fahner said in a statement. “Today, legislators put the people over politics and put the state on a viable path forward.”

SB1 is projected to reduce Illinois’ almost $100 billion unfunded pension liability by more than $21 billion and 30-year state contributions by $160 billion – funds that can be reinvested into state programs and used to pay down the state’s backlog of unpaid bills.”

The legislation’s most important elements include reducing annual cost-of-living-adjustments, phasing in increases in retirement ages, instituting a pensionable salary cap, reducing employees’ contributions by one percentage point and instituting a new funding schedule for the systems to be fully funded by 2044.

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